The Canadian Housing and Mortgage Company (CMHC) is Canada’s leading publisher of housing market, employment and mortgage statistics. The Winter 2008 CMHC report summarized herein represents some of the most accurate predictions available on the Ottawa Carleton housing market and mortgage trends. It is divided into 4 sections respectively: New Home Sales, Resale Market, Local Economy and Mortgage Trends.
New Homes
New home sales in Ottawa will finish 2008 up 5.3%. This represents the third highest annual growth in 20 years. Much of this growth is due to the areas resilient local economy and strong net migration. This said, as we enter 2009 demographic trends point to a moderation in housing demand and should result in slightly lower housing starts in general.
Most of the new construction occurring in the Ottawa-Carleton area is occurring in Nepean, Cumberland and Kanata. In fact, of all the single detached homes started in 2008, 85% will have occurred in outer Ottawa or 'Greenbelt' area. This trend is predicted to continue into the long term. This is due in large part to preferences of settled immigrants to purchase more affordable dwellings located around the City.
High density apartments will also enjoy healthy growth into 2009. This is due in part to the rising cost of land in the Ottawa area. In general, Ottawa and Carleton's New Home market will remain at strong levels going into 2009 and this makes for a very favourable environment to attain a new mortgage.
Resale Market
2008 began slowly, however resale activity increased significantly to the end of the year. This offers good evidence of the local economy's resilience to the widespread economic downturn. This said, as we enter 2009 resale activity is predicted to moderate by about 5%. This kind of performance is still very good by historical standards representing the second strongest market ever. 2009 should represent a calmer, more balanced resale market. Accordingly, housing resale prices will increase at about the rate of inflation.
Specifically, the average selling price of a house in the Ottawa Carleton area will be $288,500 at the end of '08 or up 5.7%. As the Cities adjust to the economic downturn, this growth in value should moderate to 3.6% in '09, approaching the $300,000 mark. As mentioned, the Downtown Core will remain particularly strong with prices increasing above average at 9%. Ottawa's outskirts will remain strong as well with above average pricing increaseses.
Economic Analysis
Due to a great deal of strength in Ottawa's Public Sector, the areas employment is forecasted to finish 2008 is good condition. In 2008, the areas employment is expected to increase by 2.3% to an employment level of 498,000. In 2009, the market is expected to strengthen by a more modest 0.8% to reach 500,000. Moreover, average weekly earnings will increase by 5% in 2008 and a more modest, yet strong 3% in 2009. So we can see that while the Ontario economy as a whole slows, the Ottawa Carleton area remains quite resilient.
Mortgage Trends
Mortgage rates in Ottawa Carleton are forcasted to decrease into 2009 to an extent depending on several economic factors. Rates will remain low until early to mid 2010 when due to increases in 5 year bond prices, mortgage rates should begin to trend upwards. A strengthening economy towards the end of 2010 would also put upward pressure on rates. So the present time represents a perfect opportunity to lock in to a fiver year + fixed rate mortgage as rates remain at historical lows.
For questions feel free to contact me, Brent Richardson, or leave a post and I'll be sure to respond.
www.brentrichardson.cabrent@brentrichardson.ca
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